This month, a reduction of California Avenue’s roadway from four lanes to two seemed like a done deal. But, a group of local merchants appealed to a higher authority, which appeared likely to put a $1.2-million grant in jeopardy.

Addressing the Metropolitan Transportation Commission, which controls the purse strings of regional transportation projects, local merchants said they felt ignored by the city of Palo Alto. They feared that the lane reduction would create heavy congestion on the street.

The Commission distributes the funds to the Santa Clara Valley Transportation Authority, which had committed to covering the lion’s share of the cost for the redevelopment. Counting on this source of funding, the city had intended to set aside only $550,000 for the project.

“Quite honestly, the issue is we need someone to listen. That’s it,” attorney William Ross told the commission.

After hearing the complaints, the Metropolitan Transportation Commission agreed to put the project on hold.

However, Patrick Burt, Palo Alto city council member, said it is likely the plan will go forward. “People get all concerned when these claims are made,” he said. “But I consider it very unlikely that they will have any validity.”

Burt said the merchants’ complaints had been heard, but “there’s a difference between not being heard and not being agreed with.”

At the city council meeting late Monday, Council member Gail Price, a representative from the Santa Clara Valley Transportation Authority, said they were quite enthusiastic about the project.

The council agreed to go ahead with the general design concepts, with the one exception of the sidewalk lighting. The council agreed to consider additional sidewalk lighting to appease local merchants. They approved a negative declaration on a full environmental review, which is required by California law.

Curtis Williams, director of planning and community environment, said the city remains optimistic that the grant will be finalized next month. He said the city would establish a fund for the full $1.8 million, expecting to be reimbursed from the grant.

Williams said the events could have been prevented, “had the city been informed,” and “could have had someone there to respond” to the merchants’ complaints. He explained that the item was included in a long list of about 100 projects for routine approval.

Williams said there would be no commitment to move forward with the design until the grant had been formally approved. Construction would not begin until early next year.

This was not the first time local businesses had spoken out against the plan. Some residents had vocally opposed it at a Planning and Transportation Commission meeting in January.

David Bennett, owner of Mollie Stone’s Market, drafted a petition signed by 30 residents and business owners. He wrote that the market would suffer from “reduced access” as a result of the redevelopment.

Palo Alto conducted a traffic study to address this concern. It concluded that the lane reduction would not significantly increase congestion. Traffic levels are currently only a fraction of what the street can handle.

Burt said most residents and business owners were increasingly coming out in favor of the plan. The opponents, he argued, “seem to have resistance to any change.”

Burt spoke shortly after the city council had analyzed the annual citizen survey. Compiled by the office of the City Auditor, the resulting summary indicated that many Palo Alto residents were skeptical of any new developments. Only 53 percent said they felt positive about the “overall quality of new development” in the city, down 2 percent from 2009.

Williams said he hopes that in the long-term, redevelopment will provide a “safer and more attractive area for pedestrians and cyclists” by providing additional parking spots, bicycle racks and a small center island for pedestrians.

California Avenue has long been considered the less attractive cousin of tree-lined University Avenue. The city hopes this redevelopment will be just the first of a wider plan to improve the overall aesthetic of the street.

New street lights are part of a wider redevelopment of California Avenue. (Photo: Georgia Wells)

In January, the art commission approved a modern fountain for the plaza at the end of California Ave. In September 2009, the street’s redevelopment began with the removal of 50 mature trees, which were replaced with red maples.

Burt said Palo Alto has struggled to increase the vitality of the street for over a decade. Fifty years ago, he explained, California Ave. was just a “major arterial that crossed the tracks.”

A century ago, California Ave. was the main commercial area of the town of Mayfield. After being incorporated into the town of Palo Alto in 1925, it was not intended to be a bustling retail district. “No-one ever redesigned the street to acknowledge that it’s now a dead-end downtown,” Burt said.

Today, the street is lined with funky cafes and restaurants. Its prime location near the Caltrain station and the Oregon Expressway has guaranteed a steady stream of customers. But California Ave. has not achieved its full potential, said Burt. “I’m convinced this investment will be positive.”

Williams said there were some “legitimate” fears that heavy construction would deter customers. The city would set up series of meetings with local merchants to discuss how to minimize the negative impact.

In the month prior to the merchant’s appeal to the commission, there were signs of discontent. Employees at popular California Avenue hangout, Antonio’s Nuthouse, were unconvinced by the city council’s claims that the redevelopment would increase business.

Kimberly Holmgren said the plan would destroy the street’s identity. “It’s comfortable here,” she said, and unlike University Ave., “you don’t feel like you have to have a lot of money to walk on it.”

Stephanie Livingstone, a bartender at the Nuthouse, noted that many businesses did not have a back entrance. Livingstone said she feared that the lane reduction would close-off space in the street for large deliveries. However, she supported any initiative to improve parking during peak hours.

Commuters and residents agree that limited parking is the biggest problem.

“This street is totally underdeveloped,” said paralegal Leslie Rubinstein, who has her nails done on California Avenue every two weeks. “I can’t imagine how much business they lose here because no one can park.”

Rubenstein argued that heavy construction might be detrimental, but the risks are worth the payoff. “It might take six months to put in parking, but I think people should appreciate it in the long run.”

Monica Pinon, a barista at the Printer’s Café on California Avenue, would welcome the new parking spots. “I think it will increase our business,” she said.

Pinon regularly arrives to work half-an-hour early just to find parking. “Sometimes I have to park way over and walk,” she said. She feared that customers would take their business elsewhere if there were no available spots nearby.

Over the years, Pinon has struggled to pay four parking tickets. Pinon said she had not moved her car in the allotted two hours because her boss had not returned in time to relieve her.

Residents said they feared the major downside was that California Ave. could become a victim of its own success.